Web3 hype? A critical perspective

Web3 and its promise of decentralisation appears so appealing to many, it has become a hype.

BUT, decentralisation also entails a lot of problems.

There is a cost: economically and in terms of online harms that have been exacerbated already.

But let’s take a step back.

What is web3?

If you ask S. Galloway, it is a term describing a crypto-powered internet, where its promoters talk of using blockchain, crypto, and NFTs to transfer power back to the internet community.

The promoted vision of web3 of being apolitical, decentralised and inclusive, stands in contrast to the challenges ranging from hate speech, to concentration of power, or the extraction/transaction economy and toxic business models.

The idealistic vision of web3 is wonderful. It is guided by ‘less trust, more truth’ made possible by blockchain, which enables transparancy and irrevocability and replaces trust in good intentions.

BUT, what about bad actors?

Or the centralisation of power thanks to big data?

Or the lack of robust interfaces with the real world, its legal systems, and the operating economy, which made it easy to create economically valuable new services in the existing economy?

How would I contextualise web3?

I think O’Reilly brings a new approach into this, which I really appreciated. He attempts to frame web3 in terms of being part of the technological revolution that begins in a bubble and will end in maturity and golden age. Taking his cues from an economist perspective, these revolutions follow a cycle of going through a cycle that usually lasts 50-60 years.

He places web3 in its current form, as being in the bubble phase, where over-investment is funnelled into infrastructure build-out. A phase that has been underway since the dot-com bubble. In other words, the golden age (hopefully) still lies ahead.

In terms of critical perspective:

Galloway focuses on the economical side of what web3 entails and provides examples that highlight how the crypto market evolves into becoming more centralised, with insiders retaining a greater share of the tokens, and linking industry high fees, and corporate autocracy in the form of dual class shareholders thanks to VCs trying to establish monopoly power.

E. Renieris highlights other harms, such as copyright infringement, racism, content moderation problems on NFT exchange platforms, or internet shutdowns. While the first problems are evident, shutdowns represent a novel threat. Usually, internet shutdowns are enforced to limit access to social media accounts. In the recent upheaval in Kazakhstan, the shutdown had an additional effect: it crippled large scale crypto mining operations.

List of sources that have a rather critical view of web3, and I can recommend:

Introduction to web3

Web3 on Wikipedia

What is web3 and why are all the Crypto People Suddenly Talking about it? on Slate

Critical perspectives

The Third Web by tante

Why It’s too early to get excited about Web3

Keep the web free, say no to Web3 by Yesterweb

Three things web3 should fix in 2022

The Web3 Fraud

Web3

Amid the Hype over Web3, Informed Skepticism is Critical